TV Networks Begin to Rethink Free, Immediate Web Access to Shows

Earlier this week, Fox made good on its promise to limit Web access to its television content until eight days after a show has been aired.

The network’s new system enables Dish Network and Hulu Plus subscribers to watch new episodes online shortly after they air, but requires everybody else to wait. Subscribers can watch brand new episodes on Fox.com by authenticating with their Hulu or Dish Network account credentials.

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When this plan was first announced, our own Dan Rowinski wondered if the move would have the result of throttling Hulu and potentially costing the service some of its users. We may be about to find out.

As Fox backs away from the free, quickly-available Web TV content model, ABC has indicated it’s ready to do the same, according to a post on AllThingsD.

“We’ll basically push the window back or make access to the programming more difficult or later, except if customers are authenticated as a subscriber.” Walt Disney Company CEO Robert Iger said in an earnings call recently, citing a desire to preserve the company’s existing relationships with traditional content distributors.

That means that, come Fall, people may need to wait several days before watching the most recent episode of shows like Modern Family, Grey’s Anatomy and Desperate Housewives.

These moves come as little surprise as content providers have sought to maximize the profits made from television content, something that hasn’t proven simple to do as viewers increasingly shift to the Web to watch shows.

Hulu, which became profitable in 2009, is expected to earn as much as $500 million in revenue this year. Even so, the revenue seen by content providers from Internet streaming services like Hulu doesn’t come close to what they’ve made from their more traditional content distribution relationships.

The challenges experienced by television networks are somewhat akin to those faced by newspapers and magazines in recent years. While it provides a more timely and interactive mode of distributing content, the Web is slower to offer a business model that compares to these businesses’ traditional models, which tend to erode more quickly than the new ones can take shape.

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